President's Letter
For the Public and Private GoodMost of us are accustomed to a binary way of thinking in our professional lives. Either we’re focused on business objectives, e.g., maximizing profits or increasing market share, or weˇ¦re carving out time to benefit the public good, as with pro bono work. But there is interest in legislation pending in New York (as of this writing) that would create a new type of corporation specifically designed to tie the two objectives together.

Bill S.79-A/A.4692-A would allow for the incorporation of “benefit corporations,” which would, as the name implies, provide that corporations may elect to pursue one or more public purposes, such as improving neighborhoods, preserving the environment, or promoting the arts, in addition to achieving business objectives.

LinkedIn for LawyersSocial media maven Nathan Egan shared tips on best practices with a meeting hall full of interested lawyers on June 16th.

Recent Committee Activity
Expand Access to Civil Legal ServicesIn a joint report, the Pro Bono and Legal Services and Alternative Dispute ResolutionCommittees commented with respect to the incorporation of ADR/Mediation into civil legal services and the simplification of forms and court processes, in response to the request of the Office of Court Administration’s Task Force to Expand Access to Civil Legal Services, as outlined in the Task Force’s November 2010 report.

National Defense Authorization Act
The Task Force on National Security and the Rule of Law wrote to Senate leaders expressing concern with a number of sections of the National Defense Authorization Act for Fiscal Year 2012. The letter highlights the sections that are impractical and inconsistent with the United States principles of justice including: 1) restriction on use of funds to transfer non-citizen DOD detainees to the United States; 2) mandatory prosecution of non-citizens in military commissions; 3) a review system heavily dominated by the military, and one in which counsel has only a limited role; 4) infringement upon the attorney-client relationship; and 5) prohibition on family visitation for detainees.
Licensing of Process ServersThe Committee on Civil Court, in testimony before the Department of Consumer Affairs, noted that although it supports amendments that would clarify the rules and simplify new recordkeeping requirements regarding process servers, it opposes those amendments which would substantively reduce the recordkeeping obligations of process servers, and offered suggested modifications to the Department. The regulations have been drafted to implement the City’s recent law regarding regulation of process servers.
Marriage EqualityThe Estate and Gift Taxation Committee issued a memorandum in support of marriage equality that outlines the discriminatory effects the current law has on same-sex couples with regard to transfer taxation such as estate, gift, and generation-skipping transfer taxes.

Foreign Account Tax ComplianceIn a letter to the IRS, the Committee on Estate and Gift Taxation commented on the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act of 2010, as they relate to trusts and beneficiaries of trusts. In particular the comments addressed the following provisions: 1) disclosure of information with respect to foreign financial assets; 2) annual reporting with respect to passive foreign investment companies; 3) the presumption that a foreign trust has a U.S. beneficiary; and 4) uncompensated use of property of a foreign trust.
Article 9 of the UCCIn a detailed report, the Committee on Commercial Law and Uniform State Laws analyzes proposed revisions to Article 9 of the Uniform Commercial Code, which governs secured transactions, as well as sales of accounts and chattel paper, and compares the revisions to existing New York law. The Committee recommends that New York enact the proposed revisions to Article 9, with several changes, as well as certain other non-uniform revisions.

City Bar in the NewsNew York Law Journal , June 16, 2011 Ethics Opinion Urges Wariness in Dealing With Lawsuit FundingIt is not necessarily unethical for attorneys to take clients who are receiving non-recourse litigation financing from third-party lenders, but the attorneys should be wary of potential conflicts of interest and breaches of confidentiality, the New York City Bar has said in a new ethics opinion.…Seth M. Schwartz of Skadden, Arps, Slate, Meagher & Flom, chair of the city bar’s ethics committee, said in an interview yesterday that the committee decided to prepare the opinion in response to a “flood of coverage in the press” of non-recourse litigation financing in the last year.…He said the committee issued the report to set forth a more comprehensive analysis of the subject for attorneys. In Ethics Opinion 2011-2, Third Party Litigation Financing, the city bar calls non-recourse litigation financing “a valuable means for paying the costs of pursuing a legal claim, or even sustaining basic living expenses until a settlement or judgment is obtained” for many clients. However, the opinion says, the financial involvement of a third party in a lawsuit requires lawyers to tread carefully to avoid ethical breaches.

Wall Street Journal Law Blog, June 16, 2011New York City Bar Rules on the Ethics of Litigation Financing
The New York City Bar has issued a new ethics opinion about litigation financing, concluding that the practice is ethical but potentially could give rise to conflicts of interest.…Skadden attorney Seth M. Schwartz, chair of the city bar’s ethics committee, told the New York Law Journal that the opinion was issued in response to a “flood” of press coverage about litigation financing, including articles that improperly have characterized the practice as inherently illegal. But the opinion does warn about possible ethical risks, including lawyers possibly giving lenders privileged information about a case, without the lawyers first getting their clients’ consent, NYLJ reports. “Providing financing companies access to client information not only raises concerns regarding a lawyer’s ethical obligation to preserve client confidences, it also may interfere with the unfettered discharge of the duty to avoid third party interference with the exercise of independent professional judgment,” the opinion says.